Brazil’s IGP-10 inflation index fell 0.51% in August, marking the first monthly decline since March and reflecting softer cost pressures in the economy.
The index, which measures wholesale prices, consumer prices and construction costs over a 10-day period ending on the 10th of each month, declined from a 0.21% rise in July. The drop was driven by lower wholesale prices, particularly in agricultural and industrial commodities, which offset modest increases in consumer prices.
Economists noted the decline aligns with expectations of moderating inflation, though the central bank’s policy stance remains a key focus. The Brazilian central bank has maintained a restrictive monetary policy to curb inflation, with the Selic rate currently at 10.50%. The IGP-10 reading follows recent data showing slower consumer price inflation, which eased to 4.07% year-on-year in July from 4.50% in June.
The decline in the IGP-10 index may reinforce expectations of a more dovish tilt in monetary policy if inflation continues to trend lower. However, policymakers have emphasized data dependency, with the next policy meeting scheduled for September. The index’s components—wholesale prices (IPA), consumer prices (IPC) and construction costs (INCC)—all contributed to the overall decrease, with IPA falling 1.05% and IPC rising 0.10%.
Market participants will closely monitor the trend in the IGP-10 index as it provides early signals of broader price dynamics ahead of official inflation reports.
